Copenhagen Covered (A). Heidi Hoi Jensen, a foreign exchange trader at JPMorgan Chase, can invest $5 million, or the foreign currency equivalent of the banks short term funds, in a covered interest arbitrage with Denmark. Using the following quotes, can Heidi make a covered interest arbitrage (CIA) profit?

arbitrage funds available	$5,000,000
spot exchange rate (kr/$)	6.1720
3-month forward rate (kr/$)	6.1980
U.S. dollar 3-month interest rate	3.000%
Danish kroner 3-month interest rate	5.000%

Copenhagen Covered (B). Heidi Hoi Jensen is now evaluating the arbitrage profit potential in the same market after interest rates change. (Note that any time the difference in interest rates does not exactly equal the forward premium, it must be possible to make a CIA profit one way or another.)

arbitrage funds available	$5,000,000
spot exchange rate (kr/$)	6.1720
3-month forward rate (kr/$)	6.1980
U.S. dollar 3-month interest rate	4.000%
Danish kroner 3-month interest rate	5.000%